ETF Chart of the Day: Not So Precious Metals

Precious metals, currencies, and fixed income were all rather volatile yesterday on heavier trading volumes, presumably predicated on the release of the FOMC minutes. We take special note of Silver, with SLV (iShares Silver Trust, Expense Ratio 0.50%) trading at its lowest levels since early August of this year.

Flows have been relatively flat in the fund lately, with SLV pulling in a net of $8 million in the last couple sessions, and year to date the fund has impressed, adding $360 million in new assets despite the recent plunge in price. In our Fund/Money Flows recap this morning we speak about similar price pressure seen in GLD (SPDR Gold Trust, Expense Ratio 0.40%) and that fund has lost more than $200 million via redemption activity in recent sessions.

Yesterday’s options activity in SLV seemed to correspond with the “sentiment” in SLV, at least judging by its year to date asset flows, that some institutional players are leaning long. We noticed out of the
money upside calls trade in SLV yesterday during the volatile session, specifically the July 21.50 strikes.

SLV is the mammoth in the Silver ETP space, with $6.8 billion in assets under management, but there are several other growing funds to take note of here. AGQ (ProShares Ultra Silver, Expense Ratio 0.95%) has become rather popular among short term traders and aggressive hedgers as the fund now averages nearly 2 million shares traded daily, while attracting $488 million in assets under management.

This fund delivers two times the daily performance of Silver bullion while ZSL (ProShares UltraShort Silver, Expense Ratio 0.95%) does the opposite (-200% daily return). DSLV (VelocityShares 3X Inverse Silver
ETN, Expense Ratio 1.65%) and USLV (VelocityShares 3X Long Silver ETN, Expense Ratio 1.65%) have had some traction as well in the last couple years, especially during volatile trading periods in Silver and the precious metals.